Profit-Taking Undercuts Bank Stocks

Bank stocks fell Tuesday as investors took their profits from Monday's rally.

The KBW Bank Index fell 1.42%, after rising 3.55% the day before on news that the G-20 leaders would continue to stimulate their economies. Meanwhile, the broader markets had a choppy day; the Dow Jones Industrial average closed up 0.2%, but the Standard & Poor's 500 index lost 0.01%.

"There was a little bit of irrational exuberance yesterday," said Theodore Kovaleff, an analyst at Horwitz & Associates. "Part of the problem is that people are gun-shy now, so they're thinking that if you've got to profit, you ought to take some of it now instead of seeing it possibly erode."

Bank of America Corp. rose 1.7%, after Chief Executive Kenneth Lewis told an investor conference that the company's integration of Merrill Lynch was ahead of schedule and would yield more in cost savings than expected.